Prices in the $3-trillion-plus global petrochemicals market rose 7.5 percent to $1,357 per metric ton (/mt) in September, according to the monthly average of the Platts Global Petrochemical Index (PGPI), a benchmark basket of seven widely used petrochemicals. This is up from the August average of $1,262/mt, which also marked a 7.5 percent increase from the prior month.

September also was the first month since October 2011 which petrochemical prices were trading above year-ago levels. The September 2012 average was 2.5 percent above the September 2011 average of $1,324/mt.

Petrochemicals are used to make plastic, rubber, nylon and other materials for consumer products, packaging, manufacturing, construction, pharmaceuticals, aviation, electronics and nearly every commercial industry.

“We continued to see stronger average naphtha prices in September, which provided price support for olefins,” said Jim Foster, Platts’ senior editor of petrochemical analytics. “Tight supplies also continued to plague some global markets.”

The price increase in naphtha, a primary raw material input for olefins production through steam crackers, resulted in higher ethylene and propylene prices globally in September. Of the seven components included in the PGPI, ethylene posted the largest gain, climbing 10 percent to $1,350/mt, up $122 from the August average price of $1,228/mt. The increase in the ethylene average, though, was supported mostly by higher prices at the beginning of September. By the end of September, the global index fell to $1,339/mt on September 28, down from $1,359/mt on August 31.

The increase in the average ethylene price resulted in an 8 percent gain in polyethylene prices, with linear low density polyethylene averaging $1,532/mt in September, up from $1,424/mt in August.

Propylene, which also can be produced from naphtha, gained 8 percent in September, climbing to $1,214/mt, up from $1,123/mt in August. Polypropylene, which is produced from propylene, gained 6 percent in September, climbing to $1,513/mt, up from $1,431/mt in August.

Aromatic petrochemical prices also were higher in September. Of the three aromatic components in the PGPI, toluene posted the largest gains, climbing 7 percent to $1,266/mt, up from $1,178/mt in August. Paraxylene prices gained 6 percent in September, climbing to $1,478/mt, up from $1,390/mt in August. Benzene posted the smallest gains of all products in the PGPI, climbing 4 percent to $1,290/mt – up from $1,245/mt in August.

Petrochemical prices continued to outpace global equity markets in September. The Dow Jones Industrial Average was up three percent in September. Both the Nikkei 225 and London Stock Exchange Index were up less than one percent.